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Demand curve shift:

Changes in the prices of related goods

supply demand

· Substitutes:

  • If the price of replacement increases the demand for the product under consideration increases.
  • If the price of replacement decreases, the demand for the product under review decreased.

· Complementary:

  • If the price of further increases, the demand for the product under review decreased.
  • If the price of supplement decreases, the demand for the product under consideration increases.
  • income changes

· Normal:

  • If income increases, the demand for the product under consideration increases.
  • If income decreases, the demand for the product under review decreased.

· Lower:

  • If income increases, the demand for the product under review decreased.
  • If income decreases, the demand for the product under consideration increases.

Changing tastes and expectations

– Cause displacement of the demand curve, which may increase (shift to the right and upward) or decrease the quantity demanded (displacement to the left and down).

Supply curve shift:

· Changes in input prices

  • An input is a well-used to produce other goods.
  • An increase in the price of inputs makes the higher the cost of production and hence the supply decreases.
  • A reduction in the price of inputs has the reverse effect.

· Changes in technology

  • The development of a new technology that reduces costs, shifts the supply curve to the right.

· Number of producers

If increasing the number of producers the supply curve shifts to the right and down.

If decreasing the number of producers the supply curve shifts to the left and up

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